D Ieteren ANNUAL REPORT 2008

Transcription

1 D Ieteren ANNUAL REPORT

2 JEAN-JOSEPH D IETEREN WHEELMAKING Jean-Joseph opens his wheelwright workshop and provides various horse carriage makers in Brussels with wheels as a subcontractor. ALEXANDRE D IETEREN HORSE-CARRIAGEMAKING Alexandre opens his own factory on the rue Neuve and starts building complete vehicles. ALFRED ET EMILE D IETEREN HORSE-CARRIAGEBUILDING The two brothers move their father s workshop to the chaussée de Charleroi. They participate in numerous industrial exhibitions and give the workshop an international character. They become suppliers to the Court of Holland and later to the Court of Belgium. LUCIEN D IETEREN AUTOMOBILE COACHWORKING In 1919, after his brother Albert left, Lucien renames the company Les Anciens Etablissements D Ieteren Frères. Carrosserie de Grand Luxe. and specialises in the design and production of bodies fitted on the chassis of many different brands. In 1931, the company starts distributing American car brands like Studebaker e.g.. PIERRE D IETEREN DISTRIBUTION AND INDUSTRIALIZATION Pierre signs an agreement with Volkswagen in 1948 to distribute the famous Beetle throughout Belgium. A new assembly plant is opened in Forest and the first Studebaker comes there from the production line in The Beetle comes next in Pierre also launches Dit Rent-a-car, the short-term car rental. Contents 2 Message to Shareholders 4 Group Activities 6 Automobile Distribution D Ieteren Auto 20 Short-Term Car Rental Avis Europe plc 30 Vehicle Glass Repair and Replacement Belron s.a. 40 Financial Report 102 Major Risk Factors 103 Corporate Governance 106 Share Information 108 Index of Management Report ROLAND D IETEREN INTERNATIONALIZATION The takeover of Avis Europe in 1989 and the purchase of Belron in 1999 demonstrate the will of the family to carry on with the development of the company while emphasising its automobile experience.

3 D Ieteren. The Facts. D Ieteren is an international group, active in three sectors of services to the motorist: > AUTOMOBILE DISTRIBUTION in Belgium of Volkswagen, Audi, SEAT, Škoda, Bentley, Lamborghini, Bugatti, Porsche and Yamaha; > SHORT-TERM CAR RENTAL in Europe, Africa, the Middle East and Asia through Avis Europe plc and the Avis and Budget brands; > VEHICLE GLASS REPAIR AND REPLACEMENT in Europe, North and South America, Australia and New-Zealand through Belron s.a. and notably its CARGLASS, AUTOGLASS, SAFELITE AUTO GLASS, SPEEDY, LEBEAU, SMITH&SMITH and O BRIEN brands. s.a. D Ieteren n.v. 100% 59.6% * 77.4% D Ieteren Auto Avis Europe plc Belron s.a. 40.4% 6.3% 16.3% D Ieteren and its activities are present in 120 countries on 5 continents serving more than 18 million customers a year. * Indirect interest through D Ieteren Car Rental s.a. London Stock Exchange Minority Shareholders Cobepa Group Key figures IFRS Belgian GAAP Consolidated results (EUR million) Sales 6 6, , , , , ,335.2 Current operating result 1, Current result, group s share: - before tax 1, after tax 1, Group s share in the result for the period Financial structure (EUR million) Equity of which: 1, , , , Capital and reserves attributable to equity holders Minority interest Net debt 2, , , , , ,472.8 Data per share (EUR) Current result after tax 1,2,4, group s share Group s share in the result for the period 3, Gross dividend per ordinary share Net dividend per ordinary share Net dividend per ordinary share + strip VVPR Capital and reserves attributable to equity holders Highest share price Lowest share price Share price as at 31/ Average share price Average daily volume (in number of shares) 8,024 7,713 6,207 4,920 4,723 4,723 Market capitalisation as at 31/12 (EUR million) , , , Total number of shares issued 5,530,262 5,530,262 5,530,262 5,530,262 5,530,260 5,530,260 Average workforce (average full time equivalents) 28,450 26,004 20,578 18,690 17,453 7, Under IFRS: before unusual items and re-measurements. 2. Under Belgian GAAP: before amortisation of consolidation differences. 3. Result attributable to equity holders of D Ieteren, as defined by IAS Under IFRS: calculated in accordance with IAS 33. Under Belgian GAAP: calculated on the basis of the number of shares in circulation at the end of the period (adjusted to take into account the participating shares each granting a right to 1/8 of the ordinary dividend). 5. As restated following application of IAS 21 revised. 6. Excluding in 2006 and 2007 the discontinued operation in Greece (application of IFRS 5). 7. As restated in 2006 following the malpractice identified in Portugal.

4 External sales by activity An international group CHANGE Automobile Distribution 1.4% Car Rental -1.0% Vehicle Glass 7.8% Total 3.0% Total: EUR 6,146.8 million 43.6% 35.1% 21.3% Vehicle Glass Repair and Replacement Car Rental Car Rental and Vehicle Glass Repair and Replacement Automobile Distribution, Car Rental and Vehicle Glass Repair and Replacement Current operating result 1 by activity CHANGE Automobile Distribution % Car Rental 5.8% Vehicle Glass 11.1% Total 3.7% Total: EUR million 23.6% m Financing structure: 3 separate financing pools (net debt as per 31 December 2008) Net debt by activity 46.4% % 0 Current result before tax 1, group s share, by activity CHANGE Automobile Distribution % Car Rental 2.3% Vehicle Glass 11.3% Total -1.3% Total: EUR million 31.6% m Automobile Distribution Car Rental Vehicle Glass Bonds under securitisation programme Bonds and loan notes Bank loans and commercial paper Obligations under finance leases Net debt maturity profile by activity 56.7% % 0 Automobile Distribution Car Rental Vehicle Glass 1. Under IFRS: before unusual items and re-measurements. 2. The Automobile Distribution segment includes all costs related to the corporate activities, including (concerning current result), finance costs resulting from the investment in the Car Rental and Vehicle Glass segments.. Less than 1 year Between 1 and 5 years More than 5 years

5 ANNUAL REPORT 2008 THE GROUP 1 Ever since its first days, more than 200 years ago, D'Ieteren has considered external crises as opportunities. Viewing them as a catalyst for internal change, the Company has consistently demonstrated a unique ability to remain flexible, yet strong, open to novelty whilst remaining in control. D'Ieteren has once again managed to close a difficult year quite successfully. We look forward to another year of driving change, and welcome you on the journey. THE GROUP

6 2 ANNUAL REPORT 2008 MESSAGE TO SHAREHOLDERS Promise kept. In a year as difficult and as full of unexpected events as 2008, we can be justly proud of keeping our promise of achieving an almost stable consolidated current pre-tax result, group s share. The main producers of this superb success are undoubtedly the teams in our three activities. We congratulate them warmly. The Belron teams have achieved remarkable results, strengthening the company s presence in the USA by acquiring and then very rapidly integrating Diamond Glass Inc. They have also maintained organic sales and profit growth in markets which are slightly falling for the first time. The Avis Europe teams, with their recovery plan and a series of vigorous cost control measures, have been able to produce slightly rising earnings in a car rental market which fell sharply in the second half. In the current context, the D'Ieteren Auto teams achieved an excellent result, with notably record new vehicle registrations in a record Belgian market. These collective efforts have enabled the Group to end 2008 with a consolidated current result before tax, group s share, slightly down by 1.3% to EUR million.

7 ANNUAL REPORT 2008 MESSAGE TO SHAREHOLDERS 3 In Automobile Distribution, D Ieteren Auto has continued to advance, on the back of a record Belgian new vehicle market, offering a constantly expanding range of products and services in response to growing client expectations for product quality and environmental performance. Registrations reached a record level, with deliveries relatively stable compared with the exception year The market share has, however, dipped slightly owing to supply not always keeping up with strong demand. On the other hand, earnings have been negatively affected by losses on sales of less-than-a-year-old used cars owing to the weakness of the second hand car market and the deteriorating economic climate. But, in a highly competitive market, D Ieteren Auto still comes out ahead of the pack thanks to two major strengths: its specialist networks for each car make and its many initiatives to better satisfy its customers and earn their loyalty. And what makes D Ieteren Auto what it is today is also its close, 60-year relationship with the Volkswagen group. In 2009 the car market promises to be significantly down on In this context, D Ieteren Auto will still be doing everything possible to increase its market share, in particular through new vehicle launches and initiatives to gain and maintain customer loyalty. In Vehicle Glass Repair and Replacement, Belron again produced a very good performance, thanks to sustained organic growth, despite a slight decline of the VGRR market owing the difficult economic conditions and the high fuel prices which affected the number of miles driven. Two factors in particular explain this continuing success. The first is the sharing of best practices within the group. This includes the further introduction of the new internet site which allows customers to fix appointments online. Belron has also tested a new advertising campaign in a number of countries, using TV for the first time with very promising results. The second factor is the constant attention accorded to improving the conversion rate and customer satisfaction, which reached a record level in Belron continued its geographical expansion by acquiring Diamond Glass Inc. in the USA and fully integrating it into the existing US activities by year-end. It also acquired Mobilglas Denmark, giving it market leader position in this country. In 2009 Belron should continue its internal growth, based on its service efforts towards customers, insurers and fleet partners, and on increasing operational efficiency. In Car Rental, Avis Europe achieved a slightly better pre-tax result than in 2007 in a very difficult economic context. Average rental revenue per day at constant exchange rate increased for the second year running, with volume stable compared with These achievements prove the effectiveness of the recovery programme initiated in 2005, and the well-foundedness of the investments in revenue management. However, as at D Ieteren Auto, major losses on the residual values of the car fleet have severely depressed results. Avis Europe reacted with new cost reduction initiatives during the year, in particular through vigorous management of fleet levels, a recruitment freeze and paring discretionary expenditure. The morose economic climate has not prevented Avis Europe from continuing its threepronged strategy of make differentiation (the 3-minute promise has now been generalized), pursuing revenue management initiatives and its partnership policy (that with the SNCF was renewed for a further 5 years). Avis Europe expects to pursue its strategy in 2009 whilst continuing to benefit further from the flexibility of the business. However, the deterioration of the economy led the Board to review the carrying value of the company s investment in Avis Europe in the consolidated accounts, as prescribed by the accounting norm IAS 36. A non-cash impairment charge has therefore been recorded at the end of the financial year. The economic and financial crisis that the world is passing through is without recent precedent held several surprises, but finally ended with a number of successes will without any doubt be a source of opportunities and new challenges. Let us therefore view this crisis as a catalyst for change, which will enable us to be even more innovative and agile in an increasingly turbulent environment. More than ever before the involvement, enthusiasm and talent of all our staff are the key factors of our success. Their unfailing commitment to the growth of the Company, year by year, is exemplary and deserves our full gratitude. We would equally thank our customers, shareholders and partners for their confidence and their loyalty, the solid foundations on which our future is built. Jean-Pierre Bizet Managing director Roland D Ieteren Chairman MESSAGE TO SHAREHOLDERS

8 4 ANNUAL REPORT 2008 GROUP ACTIVITIES One goal: leadership. Automobile Distribution > 9 WELL-KNOWN CAR MAKES. > 120,000 NEW VEHICLES DELIVERED. OUR ROLE > Importation and distribution of Volkswagen, Audi, SEAT, Škoda, Bentley, Lamborghini, Bugatti and Porsche vehicles in Belgium; > Management of 5 distribution networks with more than 300 independent dealers throughout Belgium; > Management of 17 corporate-owned D Ieteren Car Centers and 4 Porsche Centers, mainly in the Brussels and Antwerp regions; > Long-term car rental and finance leases through D Ieteren Lease and D Ieteren Vehicle Trading; > Used car sales through two My Way centres at Drogenbos and Kortenberg and around 80 dealers affiliated to the My Way Network ; > Distribution of Yamaha products in Belgium and Luxembourg through D'Ieteren Sport; > Importation and distribution of spare parts and accessories to all dealers. OUR STRENGTHS > A more than 60-year relationship with the Volkswagen group; > In-depth knowledge of the Belgian automobile market, enabling to tailor product and service offerings to customer wishes; > A proven network organization that is both flexible and close to the customer; > Logistics, IT and marketing experience; > A 19.8% share of the new car market in Car Rental > OVER 3,900 LOCATIONS IN EUROPE, AFRICA, THE MIDDLE EAST AND ASIA. > SERVING MORE THAN 8 MILLION CUSTOMERS. OUR ROLE > Supply of short-term car rental services through: two brands: Avis and Budget in close cooperation with Avis Budget Group, Inc., which owns the global rights to the two brands; a network of over 3,900 locations, corporately-owned or licensed, in more than 100 countries in Europe, Africa, the Middle East and Asia. > A leading car rental company adopting the We Try Harder. ethos in every business relationship with customers, employees, shareholders, suppliers, licensees, partnerships and society as a whole. OUR STRENGTHS > Two strong global brands - Avis and Budget; > Leading market position; > An extensive worldwide network with representation at key airport and train station locations; > Strong travel-related partnerships with airlines, rail, credit card and hotel companies; > A customer-oriented website making car rental reservations both fast and straightforward; > Diversified customer base and sales channels; > Strong central support services. Vehicle Glass > THE WORLD LEADER IN VEHICLE GLASS REPAIR AND REPLACEMENT. OUR ROLE > World n 1 in vehicle glass repair and replacement (VGRR), with 1,800 branches and 7,900 mobile vans, serving more than 9 million customers in 28 countries across 4 continents; > A 24 hour, 7 days a week repair and replacement service, mobile or at its branches, generating high customer satisfaction; > A unique business model delivering its insurance partners significant savings in the cost of their glass claims. OUR STRENGTHS > A clear dedication to, and focus on, vehicle glass repair and replacement; > An extensive network of corporatelyowned and franchised businesses across Europe, North and South America, Australia and New Zealand; > A portfolio of business units operating in markets at different stages of maturity, enabling both profitability and growth opportunities; > The best known brands in the industry: CARGLASS across continental Europe and in Brazil, AUTOGLASS in the UK, O BRIEN in Australia, SMITH & SMITH in New Zealand, LEBEAU, SPEEDY GLASS, DURO VITRES D AUTOS and APPLE AUTO GLASS in Canada, and SAFELITE AUTO GLASS, ELITE AUTO GLASS, AUTO GLASS SPECIALISTS, DIAMOND TRIUMPH GLASS and CINDY ROWE AUTO GLASS in the US; > Highly efficient operations achieved by the sharing of best practices across the group; > Numerous long-term partnerships with leading insurers and fleet partners.

9 ANNUAL REPORT 2008 GROUP ACTIVITIES 5 D Ieteren s activities are or have the potential to become market leaders. With very different geographic footprints, they offer attractive growth opportunities, either organically or through acquisition. D Ieteren Auto Avis Europe plc KEY FIGURES (EUR million) IFRS Belgian GAAP New vehicles delivered (in units) 119, , , ,239 99,587 99,587 External sales 2, , , , , ,158.3 Current operating result 1, Current result, group s share before tax 1,2 after tax 1,2, Average workforce (average full time equivalents) 1,650 1,601 1,571 1,505 1,493 1,493 KEY FIGURES (EUR million) IFRS Belgian GAAP External sales 9 1, , , , , ,176.9 Current operating result 1, Current result, group s share before tax 1,9 after tax 1, Average workforce (average full time equivalents) 5,967 6,122 6,276 6,253 6,166 6, GROUP ACTIVITIES Belron s.a. KEY FIGURES (EUR million) IFRS Belgian GAAP Total jobs (in million units) External sales 2, , , , , ,120.3 Current operating result 1, Current result, group s share before tax 1 after tax 1, Average workforce (average full time equivalents) 20,833 18,281 12,731 10,932 9,794 9, Under IFRS: before unusual items and re-measurements. 2. The Automobile Distribution segment includes all costs related to the corporate activities, including (concerning current result), finance costs resulting from the investment in the Car Rental and Vehicle Glass segments. 3. Including, from 2005 on, a charge associated with the long-term incentive plan for management. 4. Under Belgian GAAP: after allocation to the Vehicle Glass segment of a net financial charge after tax associated with D Ieteren s investment in this segment. 5. Under Belgian GAAP: before amortisation of consolidation differences. 6. Including Brazil. 7. Excluding Brazil. 8. Under Belgian GAAP: contribution of the former Dicobel group to D Ieteren s current result after tax, before amortisation of consolidation differences and after allocation to the Vehicle Glass segment of a net financial charge after tax associated with D Ieteren s investment in this segment. 9. Excluding in 2006 and 2007 the discontinued operation in Greece (application of IFRS 5). 10. As restated in 2006 following the malpractice identified in Portugal.

10 102 ANNUAL REPORT 2008 MAJOR RISK FACTORS Major Risk Factors AUTOMOBILE DISTRIBUTION D Ieteren Auto s activity is primarily based on close relations built during the last sixty years with the Volkswagen group and largely depending on the existence of import agreements between both parties. This close relationship also makes the results of D Ieteren Auto dependent on the success of the models developed by the Volkswagen group. Furthermore, future developments of the European regulation concerning automobile distribution could potentially influence the competitive environment in a way that is difficult to foresee for the time being. The development of environmental standards or tax regulation on company cars could have a negative influence on volumes and mix of new vehicles sold. D Ieteren Lease s fleet represents an important asset of which the value is largely depending on the used vehicle market development. CAR RENTAL Given its extensive geographic coverage, Avis Europe s business is subject to various risks inherent to international operations and also risks associated with the demand for its services, which in itself is highly seasonal, including disruption to air travel. The group and its licensees are subject to competition from a wide range of other operators both directly and via intermediaries and brokers, increasing the prevalence and intensity of price competition. Fleet costs, one of the most important elements in operating costs, largely depend on the buying conditions negotiated with car manufacturers and the selling conditions on the used car market and therefore depend on the car industry conditions in general. It is important for the activity to have access to the necessary funds in order to finance the fleet. Avis Europe has agreements with Avis Budget Group, Inc. (ABG) for the use of the licences of the Avis and Budget brands in specified territories and for the provision of computer systems, marketing initiatives and customer referrals. Any adverse changes to the terms of these agreements or any deterioration in ABG or its business or in the relationship with ABG could have an adverse effect on the group s financial condition and results of its operations. Significant risks would exist to the stability of the group s business if access to primary insurance and/or reinsurance was constrained, denied or available only at increased costs that could not be passed on in increased prices. VEHICLE GLASS Belron operates in the vehicle glass repair and replacement (VGRR) market which is dependent on various factors notably weather conditions, changes in the vehicle park and driving speed. Weather extremes create peaks in demand which need to be managed through flexible operations whilst changes in vehicle technology or traffic speed result in changes in breakage rates and thereby overall market size. The VGRR market is also influenced by insurer and commercial business decisions towards glass coverage and preferred suppliers. Changes in insurance coverage affect motorists propensity to act on damage despite the associated safety risk. Belron employs around 21,000 full time equivalents and makes a significant investment in training to insure all its staff are appropriately qualified to fulfill their roles throughout the business. In addition, Belron uses sophisticated information technology and centralised distribution facilities which are key to the business operation and represent key risk points. In addition to its organic operational activities, Belron is also an acquisitive company and accordingly faces the usual risks associated with buying and integrating businesses. Risks related to financial instruments are explained in note 38 of the consolidated financial statements.

11 ANNUAL REPORT 2008 CORPORATE GOVERNANCE 103 Corporate Governance The Company adheres to the corporate governance principles set out in the Belgian Code of corporate governance and has published since 1 January 2006 its Corporate Governance Charter on its website. The implementation of these principles takes into consideration the unique structure of the Company s share capital, with family shareholders owning the majority and having ensured the continuity of the Company since Exceptions to the principles are set out in Section 5 of the Charter published on the Company s website. BOARD OF DIRECTORS Composition The Board of Directors consists of: > six non-executive Directors, appointed on the proposal of the family shareholders; > one non-executive independent Director, appointed on the proposal of Cobepa; > three non-executive Directors, two of whom are independent, proposed on the basis of their experience; > the Managing Director (CEO). The Chairman and the Deputy Chairman of the Board are selected among the Directors appointed on the proposal of the family shareholders. Roles and activities Without prejudice to its legal and statutory attributions and those of the General Meeting, the roles of the Board are to: > determine the strategy and values of the Company and approve its plans and budgets; > decide on major financial operations, acquisitions and divestments; > ensure that appropriate organisation structures, processes and controls are in place in order to achieve the Company s objectives and properly manage its risks; > appoint the Directors proposed by the Company for the boards of its main subsidiaries; > appoint and revoke the CEO and CFO of s.a. D Ieteren n.v. as well as the CEO and CFO of D Ieteren Auto and decide on their remuneration; > monitor and review performance of executive management; > maintain effective communication with the Company s shareholders and other stakeholders. The Board of Directors meets at least six times a year. Additional meetings are held when business needs require. Decisions of the Board of Directors are taken by a majority of votes, the Chairman having a casting vote in case of a tie. In 2008, the Board met 7 times. Directors participation to Board meetings was 96.1%. Committees of the Board of Directors At the beginning of 2005, the Board set up two Board Committees: > the Audit Committee met 3 times in 2008, 2 of which in the presence of the Statutory Auditor, and reported on its activities to the Board of Directors; > the Nomination and Remuneration Committee met 4 times in 2008 and reported on its activities to the Board of Directors. Consultation Committee The Chairman and the Deputy Chairman meet monthly with the Managing Director, as the Consultation Committee, to keep in close relation with each other, monitor the Company s performance, review progress on major projects and prepare the Board of Directors meetings. Remuneration of non-executive Directors The Company discloses Board members remuneration globally. The Board believes that shareholders and investors are adequately informed by being communicated the total cost of the Board, as a collegial governing body, without details by individual Director. For the year ended 31 December 2008, a total fixed amount of EUR 1,589,630 was paid to the non-executive Directors by the Company and its subsidiaries. No other benefit or remuneration has been paid, and no loans or guarantees have been extended by D Ieteren to members of the Board. GROUP EXECUTIVE MANAGEMENT The Managing Director of s.a. D Ieteren n.v. is responsible for the Group executive management. He is assisted by the Corporate management team, in charge, at Group level, of finance, financial communication, investor relations, accounts consolidation, legal and tax matters and management control. The Chief Financial Officer, the Chief Legal Officer and the Group Treasurer constitute the Senior Management at Group level. For the year ended 31 December 2008, the aggregate amount of remuneration of all nature attributed by D Ieteren and its subsidiaries to the Managing Director of the Group was EUR 1,690,407, of which the variable part represents around 32% (decreased, due to an exceptional bonus paid in 2007).This amount includes employer premiums on corporate pension CORPORATE GOVERNANCE

12 104 ANNUAL REPORT 2008 CORPORATE GOVERNANCE Corporate Governance plans amounting to EUR 73,082 and the granting of 637 D Ieteren stock options for a total amount of EUR 16,817. No loans or guarantees have been extended to him by D Ieteren. For the year ended 31 December 2008, the aggregate amount of compensation of all nature attributed by D Ieteren and its subsidiaries to the three members of the Senior Management at Group level was EUR 889,536, of which the variable part represents around 30% (decreased, due to an exceptional bonus paid in 2007). This amount includes employer premiums on corporate pension plans amounting to EUR 147,552 and the granting of an aggregate number of 1,911 D Ieteren stock options for a total amount of EUR 50,451. No loans or guarantees have been extended to them by D Ieteren. EXECUTIVE MANAGEMENT OF THE THREE SECTORS The activities of the D Ieteren Group are organised in three sectors. The Automobile Distribution sector - D Ieteren Auto, an operational department of s.a. D Ieteren n.v. without separate legal status - is managed by the CEO D Ieteren Auto, reporting to the Group Managing Director. The CEO D Ieteren Auto chairs the management committee of D Ieteren Auto, comprising seven other members with responsibilities for D Ieteren Car Centers, Finance, Group Service, IT, Marketing, Makes and Human Resources. The Car Rental sector comprises Avis Europe plc and its subsidiaries. At 31 December 2008, Avis Europe plc is governed by a board of directors of nine members: three are appointed on the proposal of s.a. D Ieteren n.v., three are independent directors, and two are full time executive directors. The current non-executive chairman of the board is a former Avis CEO. D Ieteren s Managing Director is executive deputy chairman of the board. The board of directors of Avis Europe plc has three board committees: the audit committee, comprising three independent directors, the nomination committee and the remuneration committee, each comprising one of the directors proposed by s.a. D Ieteren n.v.. Listed on the London Stock Exchange, Avis Europe plc is in compliance with the provisions of the Combined Code, with a few exceptions fully disclosed in its annual report. The rights and obligations of the directors appointed on proposal of s.a. D Ieteren n.v., and of s.a. D Ieteren n.v. as a shareholder, are set out in the Relationship Agreement entered into at flotation in The Vehicle Glass sector comprises Belron s.a., in which D Ieteren and Cobepa own, at 31 December 2008, respectively a 77.38% and 16.35% shareholding, and its subsidiaries. At 31 December 2008, Belron s.a. is governed by a board of directors consisting of eleven members, four of which are appointed on proposal of D Ieteren, two of which are appointed on proposal of the Cobepa group, one is appointed on proposal of the founding shareholders, two are executive directors and two are independent directors. The Managing Director of D Ieteren is member of the board and chairs it. The board of directors of Belron s.a. has two board committees: the audit committee and the remuneration committee, each chaired by a director appointed on proposal of D Ieteren. DIVIDEND POLICY The Board of Directors intends to maintain its ongoing policy of providing the largest possible self-financing for the development of the Group, while ensuring regular dividend growth, results permitting. AUDITOR S FEES The fees charged in 2008 by the Statutory Auditor and linked companies for the work carried out on behalf of Group Companies in connection with the compulsory control of the statutory and consolidated financial statements amounted to EUR 224,120 (excl. VAT). Further fees of EUR 52,978 (excl. VAT) were charged for non-audit missions of which EUR 35,836 for other specific assignments and EUR 17,142 were charged for fiscal advice. ELEMENTS THAT CAN HAVE AN INFLUENCE IN CASE OF A TAKE- OVER BID ON THE SHARES OF THE COMPANY The Extraordinary General Meeting of 27 May 2004 has renewed the authorization to the Board to increase the share capital in one or several times by a maximum of EUR 60 million. The capital increases to be decided upon in the framework of the authorized capital can be made either in cash or in kind within the limits set up by the Company Code, or by incorporation of available as well as non available reserves or a share premium account, with or without creation of new shares, either preference or other shares, with or without voting rights and with or without subscription rights. The Board of Directors may limit or waive, in the Company s best interest and in accordance with the conditions determined by the law, the preferential subscription right for the capital increases it decides, including in favour of one or more determined persons. The Board of Directors is also entitled to decide, in the framework of the authorized capital, on the issuance of convertible bonds, subscription rights or financial instruments which may in term give right to Company shares, under the conditions set up by the Company Code, up to a maximum, such that the amount of the capital increases which could result from the exercise of the above mentioned rights and financial instruments does not exceed the limit of the remaining capital authorized as the case may be, without the preferential subscription right of bondholders. Without prejudice to the authorization given to the Board of Directors according to the previous paragraph, the Extraordinary General Meeting of 29 May 2008 has explicitly authorized the Board of Directors, for a renewable 3-year period, to proceed - in the event of takeover bids on the Company s shares and provided the required notification has been made by the CBFA within a 3-year period - to capital increases by contribution in kind

13 ANNUAL REPORT 2008 CORPORATE GOVERNANCE 105 or in cash, as the case may be, without the preferential subscription right of shareholders. By decision of the same Meeting, the Board of Directors has been authorized to purchase own shares, without prior approval of the Assembly, in order to prevent the Company from suffering a severe and imminent damage, for a renewable 3-year period, starting from the date of publication of the decisions taken to amend the articles of association in the appendixes of the Belgian Official Gazette. The Board is also authorized, in order to prevent the Company from suffering a severe and imminent damage, to sell own shares on the stock exchange or through a sale offer made under the same conditions to all shareholders in accordance with the law. These authorizations also apply, under the same conditions, to the purchase and sale of the Company s shares by subsidiaries in accordance with clauses 627, 628 and 631 of the Company Code. Finally, the General Assembly grants the Board annual authorizations to purchase own shares under the legal conditions, notably to cover stock option plans for managers. The rules governing the appointment and replacement of Board members and the amendment of the articles of association are those provided for by the Company Code. Board of Directors (as at 31 December 2008) Age End of term Roland D Ieteren 1,2 Chairman of the Board; Director Avis Europe plc, Belron s.a. 66 May 2010 Maurice Périer 1,2 Deputy Chairman of the Board; Director of companies 70 May 2011 Director Belron s.a. Jean-Pierre Bizet Managing Director; 60 May 2011 Executive Deputy Chairman Avis Europe plc; Chairman of the board Belron s.a. Nicolas D Ieteren 1,2 Managing Partner Enero s.p.r.l. 33 May 2011 Pascal Minne 3 Managing Director Petercam 58 May 2010 Olivier Périer 1,2 Architect; Founding Partner Urban Platform s.c.r.l. 37 May 2011 Alain Philippson 3 Director Banque Degroof, C.F.E. 69 May 2009 Gilbert van Marcke de Lummen 4 Director of companies; Director Cofinimmo s.a. 71 May 2011 Christian Varin 3 Managing Director Cobepa; Director Sapec, 61 May 2010 Carrières du Hainaut, ISOS, J.F. Hillebrand s.a. de Participations et de Gestion 1 Permanent representative: Patrick Peltzer 68 May 2010 Nayarit Participations s.c.a. 1 Permanent representative: Etienne Heilporn 69 May 2010 CORPORATE GOVERNANCE Composition of the Committees (as at 31 December 2008) Nomination and Remuneration Committee Audit Committee Chairman Roland D Ieteren Pascal Minne Members Pascal Minne Gilbert van Marcke de Lummen Alain Philippson Christian Varin Auditor End of term SC BDO Atrio, Delvaux, Fronville, Servais et Associés, Réviseurs d entreprises - Bedrijfsrevisoren, represented by Gérard Delvaux and Jean-Louis Servais May Director appointed on the proposal of the family shareholders Director descendant of, or related to, the founding family Independent Director Former Executive.

14 106 ANNUAL REPORT 2008 SHARE INFORMATION Share Information D Ieteren share Financial year from 1 January to 31 December Minimum lot 1 share ISIN code BE Sicovam code or security code Reuters code IETB.BR Bloomberg code DIE.BB FTSE classification Business Support Services Indices D Ieteren share forms part of the Next 150 and BEL MID indices of NYSE Euronext with respective weighting of 0.51% and 2.71% as at 6 March Until 31 December 2007, the share also formed part of the Next Prime index wich has been removed by NYSE Euronext. It also forms part of sector indices published by Dow Jones, Eurostoxx and Bloomberg. Evolution of the share price and traded volumes in 2008 Share Price (EUR) Volumes 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Dividend If the allocation of results proposed on note 29 of this Annual Report is approved by the Ordinary General Meeting of 28 May 2009, a gross dividend for the year 2008 of EUR per share will be distributed, i.e.: > a net dividend of EUR in return for coupon n 18, after deduction of the withholding tax of 25%; > a net dividend of EUR in return for the coupon and VVPR strip n 18, after deduction of the withholding tax of 15%. Payment of the dividend will take place as from 4 June 2009 at the head offices and branches of Bank Degroof. 01/08 02/08 03/08 04/08 05/08 06/08 07/08 08/08 09/08 10/08 11/08 12/08 Evolution of the share price over 5 years (EUR) Gross dividend per share (EUR) Share Price (EUR) /04 07/04 01/05 07/05 01/06 07/06 01/07 07/07 01/08 07/08 01/ Detailed and historic information on the share price and the traded volumes are available on the websites of D Ieteren (www. dieteren.com) and NYSE Euronext ( Avis Europe, a 59.6% subsidiary of D Ieteren, is listed on the London Stock Exchange in the Transport sector (code AVE.L).

15 ANNUAL REPORT 2008 SHARE INFORMATION 107 Denominator 31 December 2008 Number Related voting rights Ordinary shares 1 5,530,262 5,530,262 Participating shares 1 500, ,000 Total 6,030, Each of the shares and participating shares grants a voting right. Shareholding structure 31 December in voting rights Nayarit Group 30.13% SPDG Group 25.10% Cobepa s.a. 7.32% Own shares 1.68% Public 35.77% Information about the statement of capital can be found in note 29 of this Annual Report. Press and investor relations Stéphanie Ceuppens Financial Communication s.a. D Ieteren n.v. Rue du Mail, 50 B 1050 Brussels Belgium Tel.: Fax: financial.communication@dieteren.be VAT BE Company registration number Brussels Information about the Group (press releases, annual reports, financial calendar, share price, statistical information, social documents ) is available, free of charge, mostly in three languages (French, Dutch, English), on the website: or on request. Ce rapport annuel est également disponible en français. Dit jaarverslag is ook beschikbaar in het Nederlands. SHARE INFORMATION Financial calendar Last day for the deposit of shares for the Ordinary General Meeting 22 May 2009 Ordinary General Meeting 28 May 2009 Payment of the dividend for the year 2008 Publication of the results for the first half June August 2009 Publication of annual results 2009 March 2010 Forward-looking statements This Annual Report contains forward-looking information that involves risks and uncertainties, including statements about D Ieteren s plans, objectives, expectations and intentions. Readers are cautioned that forward-looking statements include known and unknown risks and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of D Ieteren. Should one or more of these risks, uncertainties or contingencies materialize, or should any underlying assumptions prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected. As a result, D Ieteren does not assume any responsibility for the accuracy of these forward-looking statements.

16 108 ANNUAL REPORT 2008 INDEX OF THE CONSOLIDATED DIRECTORS REPORT Index of the Consolidated Directors Report Content of the consolidated directors report Page(s) of the annual report Evolution of the situation, activities and results of the Company 2-3, , , Major risk factors and uncertainties 102 Subsequent events 96 Circumstances susceptible of having a significant influence on the development of the consolidated group N/A Research and development N/A Financial risk management Increase of capital, issue of convertible debentures or subscription rights N/A Interim dividend N/A Acquisition of own shares Share capital protection

17 PRESS AND INVESTOR RELATIONS Stéphanie Ceuppens Financial Communication s.a. D Ieteren n.v. rue du Mail, 50 B-1050 Brussels Belgium Tel.: Fax: financial.communication@dieteren.be Website: VAT BE Brussels RPM Ce rapport annuel est également disponible en français. Dit jaarverslag is ook beschikbaar in het Nederlands. Concept and realisation: The Crew Photography: Jean-Michel Byl - Clair Obscur, Nicolas Van Haren, D Ieteren Gallery archives and picture libraries Audi, Avis, Belron, Bentley, Budget, Carglass, Lamborghini, SEAT, Škoda, Porsche, VW, Yamaha, GettyImages, Shutterstock Printing: Joh. Enschedé - Van Muysewinkel The major trading brands of the Belron Group: Belron, the Belron Device, Autoglass, Carglass, Glass Medic, Lebeau Vitres d autos, Duro, Speedy Glass, Apple Auto Glass, Safelite Auto Glass, Elite Auto Glass, Auto Glass Specialists, Diamond Triumph Glass, Cindy Rowe Auto Glass, O Brien and Smith & Smith are trademarks or registered trademarks of Belron S.A. and its affiliated companies.

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